How to Improve Supply Chain Management

Improving supply chain managment will cut production costs.
Improving supply chain managment will cut production costs. (Image: Jupiterimages/ Images)

A supply chain is a web of interconnection. Nearly every good or service a consumer purchases has a supply chain, which begins with the procurement of the good's raw materials and ends only with post-sale customer service. Today more business are abandoning the principles of mass production for supply chain management, which emphasizes smaller production and greater versatility, according to "Supply Chain Management: Best Practices." To improve supply chain management, consider these three aspects: information integration, customer service and benchmarking.

Share all information between supply chain members. Exchange data between suppliers, carriers and manufacturers. Remember that integrating all supply chain members will allow the entire chain "to respond dynamically to the needs of the end customer," according to "Supply Chain Management."

Emphasize importance of customer service. Maintain product inventories, which will allow quick sales. Ensure customer service extends past the the point of sale to services like warranty protection and maintenance. "Enhanced customer service offers greater competitive advantage to all participants in the supply chain," according to "Supply Chain Management: In Theory and Practice."

Set benchmarks -- goals for the supply chain to achieve. Conduct studies on your supply chain and competitors' supply chains. Examine data gathered from the supply chains. This will give you an idea of what your company should and should not do. Dedicate the proper labor and capital to benchmarking. "Without enough people (and the right people) to participate in benchmarking activities, and without a sufficient budget, a company's efforts to benchmark its supply chain are doomed before the project even gets started," according to "Supply Chain Management: Best Practices." And recognize a benchmarks' limitations. "The biggest danger in benchmarking is assuming too much in any one study," according to "Supply Chain Management: Best Practices."

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